BRIEFING PAPER CBP 2005, 12 November 2018 Taxi and private hire By Louise Butcher vehicle licensing in England Inside: 1. What is a ‘taxi’? 2. History 3. Licensing law in Scotland, Wales and Northern Ireland 4. Licensing law in England, outside London 5. Licensing law in London 6. Enforcement 7. Notable reports on industry reform 8. Issues www.parliament.uk/commons-library | intranet.parliament.uk/commons-library | [email protected] | @commonslibrary CBP 2005, 12 November 2018 2 Contents Summary 3 1. What is a ‘taxi’? 4 2. History 5 3. Licensing law in Scotland, Wales and Northern Ireland 7 3.1 Scotland 7 3.2 Wales 7 3.3 Northern Ireland 8 4. Licensing law in England, outside London 10 4.1 Taxis/hackney carriages 10 4.2 Private hire vehicles/minicabs 11 5. Licensing law in London 13 5.1 Taxis/hackney carriages (‘black cabs’) 13 5.2 Private hire vehicles/minicabs 13 5.3 London-specific issues 15 Emissions 15 PHV licensing reform, 2015- 16 Re-licensing of Uber, 2017- 18 Taxi ranks 20 6. Enforcement 21 7. Notable reports on industry reform 22 7.1 Law Commission, May 2014 22 Deregulation Act 2015 24 7.2 Institute for Economic Affairs, November 2016 25 7.3 All Party Parliamentary Group on taxis, 2017 26 7.4 Task and Finish Group, September 2018 28 8. Issues 32 8.1 Capping licence numbers 32 Numbers of licensed operators, vehicles and drivers 32 Historical debates about local taxi caps 32 Recent calls for PHV caps 33 8.2 PHVs cross-border working 35 8.3 Accessibility 38 Legislation 39 Future changes? 40 8.4 Passenger safety 41 Licensing of Taxis and Private Hire Vehicles (Safeguarding and Road Safety) Bill 2017-19 44 8.5 Plying for hire 45 8.6 Taximeters 47 Uber in London and the 2015 court case 48 8.7 Disruptive technology 48 Competitiveness of the taxi trade 51 Contributing Authors: Louise Butcher, Transport Policy Cover page image copyright: London by Mohammed Abdullah. Licensed under CC BY 2.0 / image cropped 3 Taxi and private hire vehicle licensing in England Summary This paper sets out the licensing arrangements for taxis and private hire vehicles (PHVs), drivers and operators in England and the enforcement of those licences. It also looks at some of the most significant reports into the future of the taxi and PHV industries in recent years and issues currently of concern to the industry and licensing authorities such as capping licence numbers, cross-border working, accessibility and disruptive technology. Taxi and PHV licensing law in England dates back in some instances to the 19th century – though the origins of the taxi trade go much further back to the 17th century. There was some update to the licensing law in the 1970s and more recently in London in the 1990s, but since then there has been no national legislative change, despite significant developments in technology, travel behaviour and customer demands. This has led to an increasing number of calls in recent years for wholesale reform of the licensing law. This was really kick-started in 2012-14 by the Law Commission, which published a comprehensive overview of the industry and how it should look going forward. It also published a draft bill for consideration by the Government. Although the Coalition Government accepted a small number of the Commission’s recommendations and legislated for them in 2015, nothing further has been done. The entry of Uber into the London PHV market and the way it has transformed it, has given impetus to the calls for reform. There are some who believe that the advent of Uber and other smartphone app-based technologies is a chance to completely rethink what the industry should look like going forward as a consumer-led, deregulated system where the differences between taxis and PHVs disappear. Others, while welcoming some of the benefits from these app-led providers in terms of consumer choice, caution against unleashing a ‘free for all’ and are calling for better regulation, standardisation across the country and more powers for local licensing authorities to cap PHV numbers and prevent cross-border hiring. Reports by the All Party Parliamentary Group on taxis, the Urban Transport Group, the Institute for Economic Affairs and others followed the work of the Law Commission and led to differing conclusions and recommendations for the future. In July 2017 in response to these reports and the changing industry particularly in and around London, the Government set up a working group to consider regulatory issues and remedies for the industry. This ‘Task and Finish Group’ reported in September 2018, recommending national licensing standards, limits on cross-border working, powers to cap licenses under certain circumstances and higher safeguarding standards. These reports and their recommendations are discussed in the substance of this paper. Please note that this paper does not look at the wider implications of the ‘gig economy’ and the employment rights and other issues which have been raised with regards to app- based operators like Uber. For an overview of some of these issues, see the Library’s Second Reading blog, “Employment rights in the gig economy”, 26 June 2017. More generally, further information on roads- and traffic-related issues can be found on the Roads Briefings Page of the Parliament website. CBP 2005, 12 November 2018 4 1. What is a ‘taxi’? The term ‘taxi’ is in common usage across the country, but there can be differences in how that term is used. For example, in London the term ‘taxi’ is synonymous with the city’s black cabs (licensed as ‘hackney carriages’) and the term ‘minicab’ tends to be used to refer to private hire vehicles (essentially anything that is not a black cab). Outside of London the term ‘taxi’ is often used to refer to both hackney carriages and PHVs, although they are licensed differently. The term ‘taxi’ is relatively modern. It was first used in legislation in the Transport Act 1980, where section 64(3) defines a taxi in the same terms as a ‘hackney carriage’.1 Most of the legislation and case law still refers to taxis as ‘hackney carriages’. The Law Commission looked at the definition of ‘taxi’ in its May 2014 report. It concluded that the term ‘hackney carriage’ should be replaced in legislation with the word ‘taxi’, while the term ‘private hire vehicle’ should remain unchanged: We … recommend that the statutory language be changed to “taxi” for hackney carriages. The use of “hackney carriage” is an historic anomaly. “Private hire”, on the other hand, is a modern term which, although it may not receive much public usage, accurately describes the service it relates to. We recognise that there is a significant depth of feeling in relation to the use of the term “taxi”, in any form, by private hire firms. Given the growth of online marketing it seems than only an outright prohibition on these terms would be effective. We acknowledge that the term “private hire” is not well-known amongst the general public, and the term “minicab” is only used to any great extent in London. Yet if private hire vehicles are to be prohibited from using signage including the word “taxi” it appears inevitable that this restriction should also apply to advertising. It could be argued that allowing private hire firms to advertise as taxis might encourage the public to try to hail private hire vehicles. On the other hand, private hire vehicles should continue to be allowed to advertise as “cabs”.2 Thus, for the purposes of this paper, and in line with the Law Commission’s recommendation, the term ‘taxi’ is used to refer to what are currently defined in legislation as ‘hackney carriages’. 1 i.e. a vehicle licensed under section 37 of the Town Police Clauses Act 1847, section 6 of the Metropolitan Carriage Act 1869, section 10 of the Civic Government (Scotland) Act 1982 or “any similar local enactment” 2 Law Commission, Taxi and Private Hire Services (Law Com No 347), Cm 8864, May 2014, p24, paras 3.31-3.32 5 Taxi and private hire vehicle licensing in England 2. History The regulation of the taxi industry could be said to have begun in the seventeenth century, under King Charles I, who was concerned about congestion in the City of London. He issued a proclamation restricting the number of hackney coaches to 50 and preventing them from carrying passengers less than three miles: King Charles I initially forbade that "any hired coach be used or suffered in London" in 1635 […] Londoners ignored the King and continued hiring any coach they could, often from "innkeepers, brokers and other tradesmen, intruders into the profession of coachmen"—according to the career coachmen who started lobbying for explicit and exclusive rights to "ply for hire" in the streets. Their petitions offered contributions for the Exchequer, streets fit for the Queen, a small army if His Majesty pleased, etc. Charles soon saw their point. In 1637 he proclaimed that just a few hired coaches were so "very requisite for our Nobility" that "there should be a small competent number allowed for such uses." He followed up shortly with Royal preferences on horse specs and buggy make. After the Interregnum, Charles II issued more licenses, and licensing fees and standards, with preference to "ancient Coachmen or such Coachmen as have suffered for their service and affections to" the King or his late father.3 In 1654 the first Parliament of Oliver Cromwell’s Protectorate legislated for the establishment of the Fellowship of Master Hackney Coachmen. Though the Act was only to remain in force for three years, it was the forerunner of every future Act of Parliament concerning hackney carriages, including coaches, horse drawn cabs and taxis until the present day.4 The present licensing system is more modern but some of it does date back to the nineteenth century.